Transfer between accounts then amount needs to be split when it arrives but is appearing in balance sheet as a deposit and a transfer

Account 1 is a trust account so money held there until the job is completed .. once completed it can be realised as income and is then transferred to the main bank account 2

There is no invoice raised as the money is held in trust until a trip (holiday) is completed.

It is only realised as income once the trip is completed so then we transfer the money from the trust account the main bank account and enter part of it as VATable income and non VATable income

Does this make sense ?

sorry am not sure .. I can double check with my accountant

is there a different solution for each method ?

Hi .. I just checked and we are on accrual accounting

Hi Cat2,

We've taken a look into this, and i think this guide might be the answer you are looking for:

https://community.intuit.com/articles/1145831-how-do-i-record-a-retainer-or-deposit and use this step by step guide. 

The part where you would split it into VATable and non VATable income is when you're creating an invoice solely for the purpose of recording the income. The invoice screen on QuickBooks allows you to record the income with two different VAT codes. Because you're on Accrual, the VAT will be recorded on the same date as you put the invoice date.

You could use the Invoice date as the date the trip is completed and the income recorded. You don't need to send the invoice to anyone, it just serves a function within your books. Mark this in the memo of the invoice so you can refer back to it.

Thanks

Super Thanks I shall give it a go .. fingers crossed it works :)

Hey Cat2,

Make sure you come back and let us know how you got on, don't leave us hanging! :D

Good Luck - We have faith in you.

Thanks,

Hi there,

It worked mostly but I still have one issue ... I raised the invoices and it matched perfectly to the latest entry in both accounts so I ended up with the correct result :)

BUT

The older entries that I had pressed undo in both accounts the invoice only seemed to match in Account 2 .. but the trust account still has these entries open and I can't seem to get it to match to them as well ?

I know I had done and undone these entries several times whilst I tried to find a solution before I contacted you but not sure what to do with these entries now ?

Any help appreciated

Thanks

Cat

Hi Cat2,

Are these entries duplicate transactions? or should they match to another transaction from your banking?

Thanks :)

I am transferring from Account 1 (Trust Account) to Account 2 (this is when it is recognised as income) and now creating an invoice so that I can match up to the bank feeds.

I pressed the match button when in Account 2 but when I went back to account 1 I still had the transfer amount so it is appearing twice in the balance sheet in Account 2 (once as a transfer and once as  payment

I have managed to work out what I was doing wrong .. from the trust account it should have been recorded as an expense against the liabilities account rather than a physical transfer to the bank account 2

Thanks for all your help everyone